Digital CPG Blog

Can your strategy move as fast as technology? Many CPG brands aren’t even online yet, but commerce has moved from online to networks to devices – specifically, tablets.

Some people are calling it t-commerce, and the iPad is now one of the hottest accessories for moms, reports Patti Ziegler.

“However, rather than creating new incremental sales, says Forrester, t-commerce will largely grow by capturing and cannibalizing traditional PC-based retail traffic.”

“And yet, most retailers have a suboptimal multichannel experience that leaves considerable room for improvement. E-commerce is growing at a double-digit pace and many retailers are ramping-up their presences on mobile and online platforms to offset a simultaneous decline of physical store sales. The ‘multi-channel monster’ will continue to grow in 2011, says Forrester, creating opportunities for retailers that create shopper experiences that seamlessly extend across smartphones, laptops, tablets, in-store kiosks and, yes, the iPad.”

Are you keeping up with how the many different ways consumers get information and shop online?

Should retailers offer coupons on their website?

“I think it has a future [because] retailers continue to drive consumers to their websites. I think a brand manager will want to keep in front of their consumers as they plan shopping trips. It really is in early stages,” said Bob Cristofono, vice president-sales at Marx, a Kantar Media solution.

CPG coupons on retailer websites take several forms:

• Links to national coupon sites; consumers can redeem these coupons at any store
• Coupon offers downloadable to loyalty cards, specific to the retailer
• Direct-to-mobile coupon offers, which are also specific to the retailer.

The latter two kinds of digital coupons turn websites into destinations, noted Cristofono, adding CPG marketers that do this “can be key drivers in aligning with key retailers and securing merchandising support. Destination websites provide direct exposure to shoppers when they’re planning trips and making purchase decisions.”

Besides leading consumers to the stores, manufacturers could also use digital offers and coupons to form a direct relationship and hold onto all of the data.

“More than three of four coupon users (77.3%) report that they ‘search the Internet for CPG coupons ahead of their next shopping trip, with7.4% doing so always and 50.6% with regularity,’ details the NCH 2010 Consumer Survey.”

Making those coupons available at the point of sale online would also be a powerful way to build loyalty and more and more manufacturers are going in this direction.

“How fast is e-commerce growing for consumer packaged goods? Fast enough that a new shopper-marketing agency has launched to focus solely on the channel. Packaged goods is now a $12 billion business across a host of pure-play e-commerce players,” reports AdAge.

“Some 10% of consumers bought consumer packaged goods via e-commerce last year, double the amount from 2009. Nielsen Co. projects e-commerce will rise from around 6% of total packaged-goods sales in 2009 to 10% by 2015 in the U.S., surpassing club stores and matching drug-stores’ share.”

So how can shopper marketing help you take advantage of e-commerce market?

E-commerce presents a far different landscape for shopper marketing than offline retail. For one thing, growth in e-commerce is coming largely from stockup “trips,” with the average online cart about three times the value of an offline cart, largely because of free or reduced shipping incentives for bigger purchases, Mr. Katz said.

Store navigation is another key factor. About 30% of online packaged-goods shoppers go through online “aisles” in a fashion similar to offline shoppers — 40% primarily use the online search box to look up categories or brands and another 30% work off auto-replenishment lists or saved shopping lists, Mr. Katz said.

Search and auto-replenishment offer the biggest opportunities — and challenges — for brands. Etailing Solutions research finds that among those 40% of shoppers using the search box, 95% of sales go to products that come up on the first page of search results. And it’s not always the market leader that comes out on top, particularly with “virtual shelves” often being much more crowded with also-rans.

Among those 30% of shoppers using auto-replenishment or saved lists, Mr. Katz said, winning offers huge and potentially long-lasting rewards.

“There’s a sense of urgency when you think of auto-replenishment,” he said. “If you’re Colgate, and Crest gets on the auto-replenishment list, that’s instant loyalty. It’s very hard to get a product off an auto-replenishment list and a new product on. It’s kind of a race to get on the auto-replenishment list right now.”

“In the just completed shopper research on private label usage conducted by Perception Research Services (PRS), fewer shoppers reported purchasing private label products on a regular basis, compared to the last wave of research conducted in July 2010 (84 percent vs. 94 percent), but those buying private label goods are buying more of it (average number purchased up 25 percent from 4.8 to 6),” reports Consumer Goods Technology.

Paper products continues to be the leading private label category purchased, with increases evidenced across almost all categories, and the largest seen for cereal (+20 percent), cleaning products (+19 percent)

“The data suggests that while the penetration of private label usage may have peaked, a significant portion of ‘triers’ have been converted to ‘believers’ who now choose the private label alternative for more types of products.”

Indeed, national brands will have to do a lot to now tempt those customers back. And might I suggest that any changes or strategies implemented for such an outcome have nothing to do with package design or messaging? To pay more, consumers are going to need an experience, not just a product. Generic brands don’t give this at all, and right now, national brands don’t either. But this is one area where the national brand is poised to be able to make a bigger impact because of all the history and meaningfulness surrounding their products.

Think of your product and your marketing campaigns as a complete experience for the customer and you may just be able to beat private label in the ring.

I’ve been talking to several bloggers and changemakers about video lately and most seem hesitant about it. Most even come back with, “I don’t watch any video online.”

Really? I seriously doubt that. Instead, I think watching video online is so natural to a lot of us that we don’t even notice we’re doing it. When I asked one marketer to pay attention to how often he clicks play, he admitted that he watches many more videos than he originally thought.

The rest of us are doing the same.

New figures released by Unruly Media show that online video sharing has doubled in volume in the past nine months, reports Chris Lake.

And they must be good videos too, because the firm, which runs the Viral Video Chart, measured sharing activity across Facebook, Twitter and blogs and found that sharing has increased by more than 86% since May 2010. Most of that sharing is done on (surprise!) Facebook. The Facebook platform lets you play video links directly on Facebook, which is no doubt a reason why the trend has picked up so much in this area.

Video content used to be expensive to produce, but now consumers and viewers don’t need anything fancy (and it just might hurt you if it is). So, if your brand has included a video content strategy into your marketing plans, what’s stopping you?

The news just keeps getting worse for brands trying to reach that millenial generation.

“According to a new report from Forrester Research, just 6 percent of 12-17-year-olds who use the Web desire to be friends with a brand on Facebook, despite the fact that half of this demographic uses the site,” reports ReadWriteWeb.

“”Even scarier for brands: Young people don’t want brands’ friendship, and they think brands should go away,” reports AdWeek.

“So what should brands do? According to Forrester’s report, they might be better off being more reactive than proactive, and they should listen. Just 16 percent of young consumers expect brands to use social media to interact with them, and 28 percent expect those brands to listen to what they say on social sites and get back to them”

Eh, I’m not so sure. Maybe brands could just be smarter about how they’re engaging online, as I suggested last week. That doesn’t mean not getting involved, but creating campaigns, content and engagement that has been deeply curated and cared for. The thing with Gen Y is, they can see right through you. Brands will have to be better, and all consumers will be better for it.

Despite the fact that we’ve been talking about innovative sampling campaigns this week, a new nationwide survey reveals that a free sample just may not be enough.

In the survey, 78% of shoppers ages 21 to 25 said they prefer discussing a product with company representatives over standing in line to receive samples. They said learning about a product through discussions and demonstrations will prompt them to think more highly of it and recommend it to others.

“Millennials stated that they think more of companies that take the time to discuss a product or service in person and they are more likely persuaded towards trial and discussion. Most importantly, after this engagement most Millennials would actually refer a friend to try the product after a good consumer engagement and promotional experience,” reports Progressive Grocer.

“Essentially, it comes down to a personalized engagement where a product representative takes an interest and is able to offer knowledgeable information on their product, the competitor’s products and answer other various questions that may arise. This will help ensure a more memorable and successful consumer engagement.”

“Surprisingly in this age of Facebook and Twitter, the younger they are, the more they want face-to-face, informational engagements. Therefore, it can be discerned that if a company wants to attract younger people to its brand and build a longer relationship, that face-to-face engagement with knowledgeable people for the product must be part of any experiential and promotional campaign.”

I think this is indicative of the free culture that Gen Y is used to. Everything on the internet is free; we’re not impressed or enticed with free. What is enticing and impressive is a brand being authentic and taking the time to champion their products in a very real way.

While it will surely be difficult for brands to implement nationwide experiental marketing campaigns to achieve such connections, I do think that they could use Facebook and Twitter. Think a brand-customer Q&A discussion or a live video chat. That might just bring the loyalty as well…

Yesterday, we talked about Kleenex using the inherently social nature of the internet to spark a social sampling campaign that increased it’s market share. Today, we’re reporting on a similar initiative by Heinz – this time on Facebook.

“Heinz has opened up a pop-up ‘tryvertising’ f-store on Facebook (tryvertising = advertising by sampling designed to create word of mouth, pop-up = temporary), making an initial 3,000 bottles of its latest tomato ketchup (with Balsamic Vinegar) exclusively available to ketchup fans – before the new product is launched in traditional stores.  The f-store is slick, simple and smart.  Kudos Heinz, for smart social commerce,” reports Paul Marsden.

Similar to Kleenex, Heinz hasn’t tried to move an existing campaign online, but rather has created an online social event that uses the best of the web to spread the word about it’s new product.

“Rather than simply mirror your traditional web-store with an f-store selling all your wares (à la Asos), instead use Facebook to create word of mouth advocacy for your new product launches by rewarding brand fans with an exclusive trial designed to stimulate word of mouth (a variableknown to accelerate product uptake). The combination of exclusivity, scarcity with experience is a proven technique for stimulating word of mouth, combined with the Facebook platform – which is essentially a word of mouth platform – with a differentiated rationale versus web stores.  In other words, use Facebook for retail events. In our book, the future of f-commerce lies in retail events, not stores that simply replicate what is sold elsewhere.”

Too many brands are trying to replicate existing experiences instead of building experiences suited towards the medium. And especially with Facebook, you can’t simply just plop your site into the iframe and expect results. You need to look at Facebook as the social platform it is, and strategize and execute accordingly.

Usually freebies are geared towards and redeemed by you and you alone. But Kleenex has tried it’s hand at social sampling, encouraging visitors to it’s site at kleenex.com to send a free pack of tissues to a friend or family member during the cold and flu season, reports AdAge.

“They could also send virtual Kleenex tissues to Facebook friends, but the million were all actual tissue packs,” said Amy Popp, Kleenex brand manager.

“People can track online how their samples inspire others to follow suit or how many samples have been sent or received by state or ZIP code. So far, 1.5 million people have done so, Ms. Popp said, and the longest ‘chain of sharing’ so far has involved 34 cycles.”

I think this is a very smart way for Kleenex to use the inherently social and sharing nature of the internet to its advantage as a brand. Instead of transferring their sampling campaign online, they came up with an innovative way to connect its customers with other customers. Ultimately, that is what every brand should be doing – not attempting to connect customers with the brand, but enabling connections and conversations between customers.

Very smart, Kleenex. And the results proved it:

“The Kimberly-Clark Corp. brand last week sent its millionth requested mini-box of tissues in North America. And the ‘Softness Worth Sharing’ campaign, aimed at introducing a new softer version of the tissue, has lifted market share 1.7 points since October, said Kleenex Brand Director Craig Smith. Nielsen data from Sanford C. Bernstein show Kleenex share up 3.9 points to 49.9% for the four weeks ended Feb. 19 vs. the period before the campaign began.”

Earlier this week we talked about how CPG companies are in dire need of cutting their spending. One area where they’re obviously not making cuts is in social media.

“It looks like the C-suite marketing set is optimistic about social media which comes as no surprise,” reports Marketing Pilgrim about a new CMO survey conducted twice annually by Duke University’s Fuqua School of Business and the American Marketing Association since 2008.

Despite less than stellar returns in other areas, CMOs are confident about social media, and spending in the area looks to increase over the next few years.

What is your level of confidence in social media?  Do you think this is where the money needs to go for CPG companies to succeed? Tell us in the comments.